Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q3 2021 Earnings Presentation
45 slides from Nextera Energy's earnings presentation, Oct 20, 2021
Slide 1: Earnings Conference Call Third Quarter 2021
Earnings Conference Call Third Quarter 2021 October 20, 2021
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results These presentations include forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward-looking statements. The factors that could cause actual results to
Slide 3: NextEra Energy delivered strong third quarter results
NextEra Energy delivered strong third quarter results NextEra Energy Third Quarter 2021 Highlights • NEE grew adjusted earnings per share by ~12% year-over-year • FPL – Net income growth of ~10% versus prior year – Proposed settlement in 2021 base rate proceeding – Major capital initiatives are prog
Slide 4: FPL results – third quarter
FPL’s earnings per share increased 4 cents from the prior-year comparable quarter FPL Results – Third Quarter Net Income EPS ($ MM) $836 $0.42 $757 $0.38 2020 2021 2020 2021 4
Slide 5: Continued investment was the primary driver of growth at FPL
Continued investment in the business was the primary driver of growth at FPL FPL EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Third $B Quarter 50.0 $45.1 FPL – 2020 EPS $0.38 $40.8 6.2 40.0 4.9 Drivers: New investments $0.03 30.0 Other, incl. share dilution $0.01 20.0 FPL – 202
Slide 6: Gulf Power results – third quarter
Gulf Power’s strong results were driven by investments in the business and continued cost reductions Gulf Power Results – Third Quarter Net Income Regulatory Capital Employed(1) ($ MM) $91 $91 $B 5.0 $4.7 $4.2 4.0 3.0 2.0 1.0 0.0 2020 2021 Q3 2020 Q3 2021 Retail Rate Base Other EPS EPS Growth Third
Slide 7: The Florida economy continues to show healthy results
The Florida economy continues to show healthy results Florida Economy Florida Unemployment & Labor Participation Rates(1) Housing Starts(2) 16% 64% 100% FL 14% 62% 80% U.S. 12% 60% 60% 10% 58% Labor 8% Participation 56% 40% Rate 6% (Right Axis) 54% 20% 4% 52% 0% 2% 50% 0% 48% (20%) 1/12 1/13 1/14 1/
Slide 8: FPL and Gulf Power had continued strong customer growth
FPL and Gulf Power had continued strong customer growth Customer Characteristics FPL Retail kWh Sales FPL Customer Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) 100 Third 77.5 Vero Impact Quarter 80 UKU Customer Growth & Mix 0.3% # of 60 Impact Customers (000’s) 40 + Usa
Slide 9: Proposed settlement in 2021 base rate proceeding
Proposed settlement in 2021 base rate proceeding maintains attractive value proposition and accelerates solar buildout FPL(1) Base Rate Request Proposed Settlement • Key elements of four-year agreement effective January 2022: – Retail base revenue increases according to the following schedule(2): $6
Slide 10: Energy Resources adjusted earnings increased by ~12%
Energy Resources’ adjusted earnings increased by ~12% from the prior-year comparable quarter Energy Resources Results(1) – Third Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $376 $0.19 $619 $0.31 $551 $0.28 ($428) ($0.22) 2020 2021 2020 2021 2020 2021 2020 2021 10 1) Attributabl
Slide 11: Energy Resources growth driven by new investments
Energy Resources’ growth was primarily driven by contributions from new investments Energy Resources Third Quarter Adjusted EPS(1) Contribution Drivers $0.40 $0.35 $0.02 ($0.03) $0.01 $0.31 $0.03 $0.30 $0.28 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q3 2020 New Existing Customer Other Q3 2021 Adjusted EPS
Slide 12: Energy Resources had a record quarter of origination success
Energy Resources had a record quarter of origination success Energy Resources Development Program(1) • ~2,160 MW of renewables and storage added to backlog – Includes ~1,240 MW of wind, ~515 MW of solar, and ~345 MW of storage – Also includes Energy Resources’ share of NextEra Energy Partners’ plann
Slide 13: NextEra Energy EPS Summary – Third Quarter
NextEra Energy’s adjusted earnings per share increased by ~12% versus the prior-year comparable quarter NextEra Energy EPS Summary – Third Quarter GAAP 2020 2021 Change FPL $0.38 $0.42 $0.04 Gulf Power $0.05 $0.05 $0.00 Energy Resources $0.19 ($0.22) ($0.41) Corporate and Other $0.00 ($0.02) ($0.02)
Slide 14: Adjusted Earnings Per Share Expectations
We remain well positioned to continue our strong adjusted EPS and dividends per share growth NextEra Energy’s Adjusted Earnings Per Share Expectations • Expect adjusted EPS growth in the range of 6% to 8% off $2.77 - $2.55 - $2.97 2021 adjusted EPS $2.40 - $2.75 $2.54 • From 2018 to 2023 expect $2.3
Slide 15: NextEra Energy Partners Third Quarter 2021 Highlights
NextEra Energy Partners continued solid execution against its growth initiatives NextEra Energy Partners Third Quarter 2021 Highlights • NEP Board declared a quarterly distribution of $0.685 per common unit, up ~15% from prior-year comparable period – Distribution per unit has grown more than 265% s
Slide 16: NextEra Energy Partners – Third Quarter Drivers
New projects contributed favorably to NextEra Energy Partners’ third quarter results NextEra Energy Partners – Third Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $400 $200 $23 $7 ($7) ($1) $175 $10 ($20) $350 $334 $162 $312 ($7) $13 $158 $300 $150 $250 $125 2020 CEPF ($12); offset $200 $100
Slide 17: NEP Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/21 Run Rate(1) $1,440 – $1,620 MM $600 – $680 MM 12/31/22 Run Rate(2) $1,775 – $1,975 MM $675 – $765 MM Unit Distribu
Slide 18: Q&A Session
Qé&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z% — 18
Slide 19: Appendix
Appendix NExTera’ NexTera energy” ENERGY PARTNERS Z% — 19
Slide 20: NEXTe@ra
NEXTe@ra ENERGY &%
Slide 21: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2020(1) 2021 FFO/Debt 13%-23% 20% 23.0% >20% Debt/EBITDA 3.5x-4.5x 3.6x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2020(1) 2021 CFO Pre-WC/Debt 13%-22% 17% 20.1% >17% CFO-Div/
Slide 22: Potential drivers of variability to adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS Balance of 2021 Potential Sources of Variability(1) Florida Power & Light • Timing of investment ± $0.005 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.005 • Interest rates (± 100 bps shift in yield curv
Slide 23: NextEra Energy Resources Projected 2021 Portfolio Financial Information
NextEra Energy Resources Projected 2021 Portfolio Financial Information (1) (includes NEER's share of NEP assets) Value of pre-tax tax Remaining Adjusted credits included in Pre-Tax Cash Contract EBITDA(2) adjusted EBITDA(3) Debt Service (4) Other(5) Flows(6) Life (7) NEER Existing Assets(8) Contrac
Slide 24: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2020 2021 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR Location MW Jul Aug Sep QTR MW QTR FY MW QTR MW QTR MW Jul Aug Sep QTD YTD Midwest 3,844 87% 99% 109% 99% 4,004 102% 97% 4,406 91% 4,307 93% 4,307 86% 107% 101% 99% 94% West 3,285 114% 103% 95% 104% 3,285
Slide 25: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2021 – 2022: 2021 – 2022: 2023 – 2024: Borderlands NM 100 Point Beach WI 100 Proxima CA 50 Walleye MN 112 Route 66 NM 50 Chariot NH 50 Niyol CO 206 Dodge Flat NV 200 Florida FL 224 Eight Point NY 10
Slide 26: Energy Storage Development Program
Energy Storage Development Program(1) Duration Duration Project Location MW Project Location MW (hours) (hours) 2021 – 2022: 2023 – 2024: Dodge Flat NV 50 4.0 Proxima CA 5 4.0 Fish Springs Ranch NV 25 4.0 Sonoran AZ 260 4.0 Arlington CA 179 4.0 CT DEEP CT 3 2.0 Wheatridge OR 30 4.0 Paulsell CA 20 3.
Slide 27: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 6/30/21(2) ($1,318) Amounts Realized During 3rd Quarter 82 Primary Drivers: Change in Forward Prices (all positions) (1,023) Gas Infrastructure ($934) hedges Subtotal – Income Statement (941) Elect
Slide 28: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 3rd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance (2) Description 6/30/21 Realized Prices (Loss) 9/30/21 Pretax amounts at share Electricity related positions $ 359 $ (63) $ (279)
Slide 29: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) Gain / (Loss)(1) Asset / (Liability) Balance Total Description 9/30/21 4Q 2021 2022 2023 2024 2025 - 2044 2021 - 2044 Pretax amounts at share Electricity related positions $ 17 $ (14) $ - $ 43 $ 51 $ (97) $ (17) Gas Infrastructure rela
Slide 30: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 2021) FPL Gulf Energy Corporate & NextEra (m illions, except per share am ounts) Segm ent Pow er Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energ
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 2020) FPL Gulf Energy Corporate & NextEra (m illions, except per share am ounts) Segm ent Pow er Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energ
Slide 32: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share(1) (2) (2) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.58 $ 0.81 $ 0.82 $ 1.02
Slide 33: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the effects of non-qualifying hedges and unrealized ga
Slide 34: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, bu
Slide 35: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's risk management tools associated with its hedging and trading procedures to
Slide 36: NeExTera energy’
NeExTera energy’ PARTNERS Z
Slide 37: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) YTD YTD (millions) Q3 2021 Q3 2020 2021 2020 Net income (loss) $ 94 $ 195 $ 463 $ (398) Add back: Depreciation and amortization 71 68 207 200 Interest expense 24 (93) (145) 730 Income taxes 6 25 54 (37)
Slide 38: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2020 2021 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR Location MW Jul Aug Sep QTR MW QTR FY MW QTR MW QTR MW Jul Aug Sep QTD YTD Midwest 1,213 89% 95% 113% 100% 1,213 104% 99% 1,213 92% 1,213 93% 1,213 90% 107% 106% 101% 95% West 1,104 111% 103% 94% 10
Slide 39: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target (1) S&P Range Threshold 2020(4) YE 2021 FFO/Debt 12% - 20% 14% 17.9% >17% Ba1 Downgrade Actual Target (2) (4) Moody's Range Threshold 2020 YE 2021 Total Consolidated Debt/EBITDA <7.0x >7.0x 3.7x 4.5x -
Slide 40: NEP Expected Cash Available for Distribution (2021 Run Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2021 Run Rate CAFD; $ MM) $1,610-$1,790 ($20-$30) ($140-$150) $1,440-$1,620 ($185-$235) ($590-$670) ($40-$45) ($5-$15) $600-$680 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimate
Slide 41: NEP Expected Cash Available for Distribution (2022 Run Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2022 Run Rate CAFD; $ MM) $1,975-$2,175 ($25-$35) ($165-$175) $1,775-$1,975 ($270-$330) ($755-$855) ($40-$45) ($5-$15) $675-$765 (2) Project-Level Corporate IDR Fees Adjusted EBITDA Debt Service Pre-Tax Tax Non-Cash M
Slide 42: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating expenses, less (d) corpo
Slide 43: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 44: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may not be able to extend, renew or replace expiring or terminated power purchase agreements (PPA), natural gas transportation agreements or other customer contracts at favorable rates or on a long-term basis; If the en
Slide 45: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's ability to make distributions to its unitholders depends on the ability of NEP OpCo to make cash distributions to its limited partners; If NEP incurs material tax liabilities, NEP's distributions to its unitholders ma